full-time equivalent employees
(2) Full-time equivalent employees (A) In general The term “full-time equivalent employees” means a number of employees equal to the number determined by dividing— (i) the total number of hours of service for which wages were paid by the employer to employees during the taxable year, by (ii) 2,080. Such number shall be rounded to the next lowest whole number if not otherwise a whole number. (B) Excess hours not counted If an employee works in excess of 2,080 hours of service during any taxable year, such excess shall not be taken into account under subparagraph (A). (C) Hours of service The Secretary, in consultation with the Secretary of Labor, shall prescribe such regulations, rules, and guidance as may be necessary to determine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis.